Millennials (those born from the early 1980s through the early 2000s) continue to struggle with financial planning. Student debt and limited employment opportunities aren’t the only things holding back Millennials from attaining financial independence and home ownership. Let’s take a look at five money mistakes Millennials tend to make—and see how they can correct them.
- Avoiding doing a budget.
Doing the math and knowing if you’re breaking even or able to save more each month is crucial for building a buffer against debt. It can be as easy as starting to use Sorted.co.nz budgeting tool. You don’t even need to leave your desk.
- Misusing credit cards.
According to an Experian study, Millennials are struggling to pay credit card bills on time, while also having one of the highest credit utilisation rates of the four generations listed. As a result of late payments and high credit utilisation—Millennials have the lowest credit scores across all four generations. Consider a credit score as a financial report card, which means you should turn in everything on time and pay the balance in full every month.
- Renting forever.
It’s no secret that Millennials are struggling to own property, but many Millennials still find themselves traveling and exploring well into their late 30’s, without plans to settle down. Exploring and travelling, living a transient life delays the onset of saving for a property, and the longer one leaves it, the harder it becomes to gain a foothold in the property market.
- Saving little to nothing for retirement.
Surprisingly, two in three Millennials intend to retire by age 65, but approximately 22% have not started saving for retirement. The journey to retirement begins with a single KiwiSaver payment, then another. Take full advantage of your employer contribution and try make above-average contributions. Building your own retirement fund takes a lot of self-determination and prudent investment knowledge, skills most people lack.
- Skipping life insurance.
Getting insurance in general may seem daunting, but it’s good to consider the various types, even ones you don’t think you need at first. Life insurance is one that might not have come up yet, but there are good reasons to consider it.
One of the benefits of getting a life insurance policy early on is that it will likely cost you less now than later—life insurance is cheaper the younger and healthier you are. Plus, you have no idea if your health might change, which could make getting coverage much more expensive or even impossible later on. And remember that your partner or spouse may likely be liable for your debts should anything happen to you.
From the basic act of budgeting to considering life insurance, these actions can help ground your financial future. Saving for later in life is the foundation for having a debt-free life and a secure retirement plans. Being prepared for the unexpected will make sure your goals and aspirations are met, regardless of your health or longevity. For quality life insurance quote, go to Pinnacle Life and you’ll be amazed how little it costs for millennials.